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NEW YORK (AP) — Back to reality and back down, Wall Street focused on the bleak landscape ahead for the economy Wednesday and wiped out its big gains from a day earlier — and then some.
The Dow Jones industrial average closed down 519 points and has now lost more than 2,000 in less than three weeks. Swings of several hundred points in just minutes, accelerated by computerized trading, have become commonplace.
This time, the selling was intensified by worries about in Europe. American bank stocks took hits because investors fretted that debt problems overseas might reach the United States.
France came under pressure amid concerns that it could follow the U.S. and become the next country to lose its top AAA rating. The French president cut his vacation short and promised to slash the nation's debts.
The stocks of leading banks in Britain, Italy and Germany were hammered. The fear is that if European governments default on their bonds, it will hurt the European banks that own them.
That could start a chain reaction that hurts the United States because large U.S. banks have loans to European banks. The result on Wall Street, which already has economic problems to worry about, was a dramatic turnaround.
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